UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 10-Q

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
    EXCHANGE ACT OF 1934

For the quarterly period ended SEPTEMBER 30, 2008
                              -------------------

                                       Or

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
    EXCHANGE ACT OF 1934

For the transition period from ________________to _________________

Commission File No. 0-8693
                    ----------------------

                              TRANSNET CORPORATION
             (Exact name of registrant as specified in its charter)

<TABLE>
<S>                                                           <C>

        DELAWARE                                                            22-1892295
--------------------------------                               ------------------------------------
(State or other jurisdiction of                                (IRS Employer Identification Number)
incorporation or organization)

45 Columbia Road, Somerville, New Jersey                                      08876-3576
----------------------------------------                                 --------------------
(Address of principal executive offices)                                       (Zip Code)

Registrant's Telephone Number, Including Area Code:                        908-253-0500
                                                                           ------------
</TABLE>



--------------------------------------------------------------------------------
Former name, former address and former fiscal year, if changed since last Report

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes  X       No
   ------       ------

Indicate by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting company (as
defined in Rule 12b-2 of the Act)

     Large Accelerated Filer ___                  Accelerated Filer ___
     Non-accelerated Filer ____                  Smaller Reporting Company  X
                                                                           ____

Indicate by check mark whether the registrant is a shell company (as defined in
Rule 12b-2 of the Act)

     Yes      X No
 ----       ----

Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of November 12, 2008: 4,823,304.


<PAGE>




                              TRANSNET CORPORATION
                                    FORM 10-Q

                                TABLE OF CONTENTS
                                -----------------



                                                                        PAGE NO.
                                                                        --------
PART I.  FINANCIAL INFORMATION
-------  ---------------------

         Consolidated Balance Sheets
                  September 30, 2008 (unaudited) and June 30, 2008         1


         Consolidated Statements of Operations (unaudited)
                  Three Months Ended September 30, 2008 and 2007           2


         Consolidated Statements of Cash Flows (unaudited)
                  Three Months Ended September 30, 2008 and 2007           3


         Notes to Consolidated Financial Statements                        4


     Item 2.  Management's Discussion and Analysis                         8


     Item 4.  Controls and Procedures                                     13

PART II.  OTHER INFORMATION
-------   -----------------

     Item 6.  Exhibits and Reports on Form 8-K                            14

     Signatures                                                           14
     Certifications                                                       15




                                       i.



<PAGE>



                       TRANSNET CORPORATION AND SUBSIDIARY
                           CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
                                                                       September 30,                  June 30,
                                                                           2008                         2008
                                                                           ----                         ----
                                                                        (unaudited)
<S>                                                                            <C>                        <C>
           ASSETS:
           CURRENT ASSETS

           Cash and Cash Equivalents .......................                $    78,571                 $   314,618
           Restricted Cash .................................                    843,639                     837,010
           Accounts Receivable -- Net ......................                  6,342,902                   6,477,948
           Inventories -- Net ..............................                    325,945                     265,977
           Other Current Assets ............................                     72,975                      17,974
                                                                            -----------                 -----------

           TOTAL CURRENT ASSETS ............................                $ 7,664,032                 $ 7,913,527

           PROPERTY AND EQUIPMENT -- NET ...................                    239,028                     271,695

           OTHER ASSETS ....................................                    205,271                     204,162
                                                                            -----------                 -----------

           TOTAL ASSETS ....................................                $ 8,108,331                 $ 8,389,384
                                                                            ===========                 ===========

           LIABILITIES AND STOCKHOLDERS' EQUITY:
           CURRENT LIABILITIES:

           Accounts Payable ................................                $ 1,123,579                 $   845,579
           Accrued Expenses ................................                    256,307                     410,729
           Lines of Credit .................................                  1,499,980                   1,955,042
                                                                            -----------                 -----------


           TOTAL CURRENT LIABILITIES .......................                $ 2,879,866                 $ 3,211,350

           STOCKHOLDERS' EQUITY:

           Capital Stock -- Common, $.01 Par Value,
           Authorized 15,000,000 Shares; Issued 7,408,524 at
           September 30, 2008 and June 30, 2008 [of which
           2,585,220 are in Treasury at September 30,
           2008 and June 30, 2008] .........................                     74,085                      74,085

           Additional Paid-in Capital ......................                 10,574,670                  10,574,670

           Retained Earnings ...............................                  1,732,545                   1,682,114
                                                                            -----------                 -----------

           Totals ..........................................                 12,381,300                  12,330,869

           Less: Treasury Stock -- At Cost .................                 (7,152,835)                 (7,152,835)
                                                                            -----------                 -----------

           TOTAL STOCKHOLDERS' EQUITY ......................                  5,228,465                   5,178,034
                                                                            -----------                 -----------


           TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY ......                $ 8,108,331                 $ 8,389,384
                                                                            ===========                 ===========
</TABLE>

See Notes to Consolidated Financial Statements.



                                        1

<PAGE>


                       TRANSNET CORPORATION AND SUBSIDIARY
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (UNAUDITED)

<TABLE>
<CAPTION>

                                                                               THREE MONTHS ENDED SEPTEMBER 30,
                                                                               --------------------------------
                                                                                    2008                      2007
                                                                                    ----                      ----
<S>                                                                             <C>                        <C>

           REVENUE
           Equipment .................................................          $ 5,928,328                $ 5,736,091
           Services ..................................................            2,636,937                  3,270,905
                                                                                -----------                -----------

           Total Revenue: ............................................          $ 8,565,265                $ 9,006,996
                                                                                -----------                -----------

           COST OF REVENUE
           Equipment .................................................            4,984,605                  5,109,939
           Services ..................................................            1,748,892                  2,209,385
                                                                                -----------                -----------

           Total Cost of Revenue .....................................            6,733,497                  7,319,324
                                                                                -----------                -----------

           Gross Profit ..............................................            1,831,768                  1,687,672
           Selling, General and Administrative Expenses ..............            1,766,151                  1,665,237
                                                                                -----------                -----------
           Operating Income ..........................................               65,617                     22,435
                                                                                -----------                -----------

           OTHER INCOME (EXPENSE):
           Interest Income ...........................................               6,669                      14,372
           Interest Expense ..........................................             (21,855)                     (4,913)
                                                                                -----------                -----------

           Income Before Tax Expense .................................               50,431                     31,894

           Income Tax (Benefit) ......................................                   --                         --
                                                                                -----------                -----------

           Net Income ................................................          $    50,431                $    31,894
                                                                                ===========                ===========

           Basic Net Income Per Common Share .........................          $      0.01                $      0.01
                                                                                ===========                ===========

           Diluted Net Income Per Common Share .......................          $      0.01                $      0.01
                                                                                ===========                ===========

           Weighted Average Common Shares Outstanding -- Basic .......            4,823,304                  4,823,304
                                                                                ===========                ===========

           Weighted Average Common Shares Outstanding -- Diluted .....            4,823,304                  4,907,958
                                                                                ===========                ===========
</TABLE>


See Notes to Consolidated Financial Statements.




                                        2

<PAGE>


                      TRANSNET CORPORATION AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (UNAUDITED)

<TABLE>
<CAPTION>

                                                                              THREE MONTHS ENDED SEPTEMBER 30,
                                                                              --------------------------------
                                                                                  2008                2007
                                                                                  ----                ----
<S>                                                                          <C>                  <C>
OPERATING ACTIVITIES:

Net Income .........................................................         $    50,431          $    31,894
                                                                             -----------          -----------
Adjustments to Reconcile Net Income to Net Cash:
Depreciation and Amortization ......................................              37,339               57,750
Provision for Doubtful Accounts ....................................                  --                   --
Inventory Reserve Adjustment .......................................                  --                   --

Changes in Assets and Liabilities:
(Increase) Decrease in:
Restricted Cash ....................................................              (6,629)
Accounts Receivable ................................................             135,046           (2,640,962)
Inventory ..........................................................             (59,968)            (373,118)
Other Current Assets ...............................................             (55,001)             (74,122)
Other Assets .......................................................              (1,151)                (979)

Increase (Decrease) in:
Accounts Payable and Accrued Expenses ..............................             123,578               76,630
Income Tax Payable .................................................                  --               (3,231)
                                                                             -----------          -----------

Total Adjustments ..................................................         $   173,214          $(2,958,032)
                                                                             -----------          -----------

NET CASH - OPERATING ACTIVITIES - FORWARD ..........................         $   223,645          $(2,926,138)
                                                                             -----------          -----------

INVESTING ACTIVITIES:
Capital Expenditures ...............................................         $    (4,630)         $    (7,525)
                                                                             -----------          -----------

NET CASH -- INVESTING ACTIVITIES ...................................         $    (4,630)         $    (7,525)
                                                                             -----------          -----------

FINANCING ACTIVITIES --
Lines of Credit -- Net .............................................         $  (455,062)         $ 2,462,668
                                                                             -----------          -----------

NET CASH -- FINANCING ACTIVITIES ...................................         $  (455,062)         $ 2,462,668
                                                                             -----------          -----------

NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS ...............         $  (236,047)            (470,995)

CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIODS ..................         $   314,618            2,462,442
                                                                             -----------          -----------

CASH AND CASH EQUIVALENTS AT END OF PERIODS ........................         $    78,571          $ 1,991,447
                                                                             -----------          -----------

Supplemental Disclosures of Cash Flow Information:
Cash paid during the period for:
Interest ...........................................................         $    15,413          $     4,913
Income Taxes .......................................................         $        --          $        --

</TABLE>

See Notes to Consolidated Financial Statements.




                                        3

<PAGE>

                       TRANSNET CORPORATION AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (unaudited)

(1.) BASIS OF PRESENTATION

       The accompanying unaudited financial statements have been prepared in
       accordance with accounting principles generally accepted in the United
       States of America for interim financial information and with the
       instructions to Form 10-Q and Article 8 of Regulation S-X. They do not
       include all of the information and footnotes required by accounting
       principles generally accepted in the United States of America for
       complete financial statements. In the opinion of management, all
       adjustments (consisting of normal recurring accruals) considered
       necessary in order to make the interim financials not misleading have
       been included and all such adjustments are of a normal recurring nature.
       The operating results for the three months ended September 30, 2008 are
       not necessarily indicative of the results that can be expected for the
       year ending June 30, 2009.

       The balance sheet as of June 30, 2008 has been derived from the audited
       financial statements at such date, but does not include all of the
       information and footnotes required by accounting principles generally
       accepted in the United States of America for complete financial
       statements.

       The accounting policies followed by TransNet Corporation (the
       "Corporation") are set forth in Note 2 to the Corporation's consolidated
       financial statements in the Form 10-K for the fiscal year ended June
       30, 2008.

       For further information, please refer to the consolidated financial
       statements and footnotes thereto included in the Corporation's Annual
       Report on Form 10-K for the year ended June 30, 2008.

       All material intercompany transactions have been eliminated in
       consolidation.

       Certain reclassifications have been made to prior period financial
       statements to conform to the current year presentation.

(2.) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

       (a) Consolidation: The consolidated financial statements include the
       accounts of the Corporation and its wholly owned subsidiary, Century
       American Corporation. Intercompany transactions and accounts have been
       eliminated in consolidation.

       (b) Inventory: Inventory consists of finished goods. The Corporation's
       inventory is valued at the lower of cost (determined on the average cost
       basis) or market.

       (c) Cash and Cash Equivalents: For the purposes of the statement of cash
       flows, the Corporation considers highly liquid debt instruments,
       purchased with a maturity of three months or less, to be cash
       equivalents.

       (d) Revenue Recognition: Revenues related to our equipment sales are
       recognized when evidence of an arrangement exists, delivery of equipment
       has occurred, the sales price of the equipment being sold to our
       customers is both fixed and determinable and collectability of the
       accounts receivable related to the equipment sale is reasonably assured
       in accordance with SEC Staff Accounting Bulletin No. 104 Topic 13.

       Revenues related to our services are recognized as the service is
       performed using the percentage of completion method of accounting under
       which the total contract revenue during the term of an agreement is
       recognized on the basis of the percentage that each contract's
       proportional performance to date bears to the total completion of
       performance. Estimates of proportional



                                        4

<PAGE>

       performance are continuously monitored during the term of the contract,
       and recorded revenues and costs are subject to revision as the contract
       progresses.

       (e) Earnings Per Share: Earnings per common share - basic are based on
       4,823,304 weighted shares outstanding for the three months ended
       September 30, 2008 and 2007. Diluted are based on 4,907,958 weighted
       shares outstanding for the three months ended September 30, 2007. The
       options to purchase an aggregate of 297,500 shares of our common stock at
       a price of $0.88 per share were not included in the computation of
       diluted earnings per share for the period ended September 30, 2008
       because the options' exercise price was greater than the average market
       price of the common shares.


(3.) NEW ACCOUNTING PRONOUNCEMENTS

       In September 2006, the Financial Accounting Standards Board ("FASB")
       issued Statement of Financial Accounting Standards ("SFAS") No. 157, FAIR
       VALUE MEASUREMENTS ("SFAS 157"). SFAS 157 establishes a single definition
       of fair value and a framework for measuring fair value, sets out a fair
       value hierarchy to be used to classify the source of information used in
       fair value measurements, and requires new disclosures of assets and
       liabilities measured at fair value based on their level in the hierarchy.
       This statement applies under other accounting pronouncements that require
       or permit fair value measurements. In February 2008, the FASB issued
       Staff Positions ("FSPs") No. 157-1 and No. 157-2, which, respectively,
       remove leasing transactions from the scope of SFAS 157 and defer its
       effective date for one year relative to certain nonfinancial assets and
       liabilities. As a result, the application of the definition of fair value
       and related disclosures of SFAS 157 (as impacted by these two FSPs) was
       effective for the Corporation beginning July 1, 2008 on a prospective
       basis with respect to fair value measurements of all financial assets and
       liabilities. This adoption did not have a material impact on the
       Corporation's consolidated results of operations or financial condition.
       The remaining aspects of SFAS 157 for which the effective date was
       deferred under FSP No. 157-2 are currently being evaluated by the
       Corporation. Areas impacted by the deferral relate to nonfinancial assets
       and liabilities that are measured at fair value, but are recognized or
       disclosed at fair value on a nonrecurring basis. This deferral applies to
       items such as long-lived asset groups measured at fair value for an
       impairment assessment. The effects of the remaining aspects of SFAS 157
       are to be applied by the Corporation to fair value measurements
       prospectively beginning July 1, 2009. The Corporation does not expect
       them to have a material impact on its consolidated results of operations
       or financial condition. In October 2008, the FASB issued Staff Position
       No. FAS 157-3, DETERMINING THE FAIR VALUE OF A FINANCIAL ASSET WHEN THE
       MARKET FOR THAT ASSET IS NOT ACTIVE ("FSP 157-3"). FSP 157-3 clarifies
       the application of SFAS 157, which the Corporation adopted as of July 1,
       2008, in cases where a market is not active. The Corporation has
       considered the guidance provided by FSP 157-3 and determined that the
       impact was not material on estimated fair values as of September 30,
       2008. See Note 4 for disclosures required by this new pronouncement.

       In December 2007, the FASB issued SFAS No. 141R, BUSINESS COMBINATIONS.
       SFAS No. 141R establishes principles and requirements for how the
       acquirer of a business recognizes and measures in its financial
       statements the identifiable assets acquired, the liabilities assumed, and
       any noncontrolling interest in the acquiree. The statement also provides
       guidance for recognizing and measuring the goodwill acquired in the
       business combination and determines what information to disclose to
       enable users of the financial statement to evaluate the nature and
       financial effects of the business combination. SFAS 141R is effective for
       fiscal years beginning on or after December 15, 2008. The Corporation
       does not expect the adoption of SFAS 141R to have a material impact on
       its financial statements.

       In December 2007, the FASB issued SFAS No. 160, NONCONTROLLING INTERESTS
       IN CONSOLIDATED FINANCIAL STATEMENTS, AN AMENDMENT OF ARB 51. SFAS No.
       160 changes the accounting and




                                        5

<PAGE>

       reporting for minority interests. Minority interests will be recorded
       initially at fair market value and will be recharacterized as
       noncontrolling interests and will be reported as a component of equity
       separate from the parent's equity, and purchases or sales of equity
       interests that do not result in a change in control will be accounted for
       as equity transactions. In addition, net income attributable to the
       noncontrolling interest will be included in consolidated net income on
       the face of the income statement and upon a loss of control, the interest
       sold, as well as any interest retained, will be recorded at fair value
       with any gain or loss recognized in earnings. SFAS 160 is effective for
       fiscal years beginning on or after December 15 2008. The Corporation does
       not expect the adoption of SFAS 160 to have a material impact on its
       financial statements.

       In March 2008, the FASB issued SFAS No. 161, DISCLOSURES ABOUT DERIVATIVE
       INSTRUMENTS AND HEDGING ACTIVITIES--AN AMENDMENT OF FASB STATEMENT NO.
       133. SFAS No. 161 applies to all derivative instruments and related
       hedged items accounted for under SFAS No. 133, ACCOUNTING FOR DERIVATIVE
       INSTRUMENTS AND HEDGING ACTIVITIES, and requires entities to provide
       greater transparency about (a) how and why an entity uses derivative
       instruments, (b) how derivative instruments and related hedged items are
       accounted for under SFAS No. 133 and its related interpretations, and (c)
       how derivative instruments and related hedged items affect an entity's
       financial position, results of operations, and cash flows. SFAS No. 161
       is effective for fiscal years and interim periods beginning after
       November 15, 2008. This standard is not expected to have a material
       impact on the Corporation's future consolidated financial statements.
       Additionally, because SFAS No. 161 applies only to financial statement
       disclosures, it will not have a material impact on the Corporation's
       consolidated financial position, results of operations, and cash flows.

       In May 2008, the FASB issued SFAS No. 162, THE HIERARCHY OF GENERALLY
       ACCEPTED ACCOUNTING PRINCIPLES. SFAS No. 162 is intended to improve
       financial reporting by identifying a consistent framework, or hierarchy,
       for selecting accounting principles to be used in preparing financial
       statements that are presented in conformity with generally accepted
       accounting principles in the United States for non-governmental entities.
       SFAS No. 162 is effective 60 days following approval by the SEC of the
       Public Company Accounting Oversight Board's amendments to AU Section 411,
       THE MEANING OF PRESENT FAIRLY IN CONFORMITY WITH GENERALLY ACCEPTED
       ACCOUNTING PRINCIPLES. The Corporation does not expect SFAS No. 162 to
       have a material impact on the Corporation's consolidated financial
       statements.

       In May 2008, the FASB issued SFAS No. 163 ACCOUNTING FOR FINANCIAL
       GUARANTEE INSURANCE CONTRACTS--AN INTERPRETATION OF FASB STATEMENT NO.
       60. SFAS 163 resolves existing inconsistencies in accounting for
       financial guarantee insurance contracts by insurance enterprises under
       FASB Statement No. 60, ACCOUNTING AND REPORTING BY INSURANCE ENTERPRISES.
       SFAS 163 requires that an insurance enterprise recognize a claim
       liability prior to an event of default (insured event) when there is
       evidence that credit deterioration has occurred in an insured financial
       obligation and clarifies how Statement No. 60 applies to financial
       guarantee insurance contracts, including the recognition and measurement
       to be used to account for premium revenue and claim liabilities. SFAS 163
       also requires expanded disclosures about financial guarantee insurance
       contracts. SFAS 163 is effective for financial statements issued for
       fiscal years beginning after December 15, 2008, and all interim periods
       within those fiscal years, except for some disclosures about the
       insurance enterprise's risk-management activities. SFAS 163 is not
       expected to have a significant impact on our consolidated financial
       statements.

(4.) FAIR VALUE MEASUREMENTS

       We adopted SFAS No. 157 on July 1, 2008 for all financial assets and
       liabilities and nonfinancial assets and liabilities that are recognized
       or disclosed at fair value in the financial statements on a recurring
       basis (at least annually). SFAS No. 157 defines fair value, establishes a
       framework for measuring fair value, and expands disclosures about fair
       value measurements.



                                        6

<PAGE>

       SFAS No. 157 defines fair value as the price that would be received upon
       sale of an asset or paid upon transfer of a liability in an orderly
       transaction between market participants at the measurement date and in
       the principal or most advantageous market for that asset or liability.
       The fair value should be calculated based on assumptions that market
       participants would use in pricing the asset or liability, not on
       assumptions specific to the entity. In addition, the fair value of
       liabilities should include consideration of non-performance risk
       including our own credit risk.

       In addition to defining fair value, SFAS No. 157 expands the disclosure
       requirements around fair value and establishes a fair value hierarchy for
       valuation inputs. The hierarchy prioritizes the inputs into three levels
       based on the extent to which inputs used in measuring fair value are
       observable in the market. Each fair value measurement is reported in one
       of the three levels which is determined by the lowest level input that is
       significant to the fair value measurement in its entirety. These levels
       are:

          o    Level 1 -- inputs are based upon unadjusted quoted prices for
                    identical instruments traded in active markets.

          o    Level 2 -- inputs are based upon quoted prices for similar
                    instruments in active markets, quoted prices for identical
                    or similar instruments in markets that are not active, and
                    model-based valuation techniques for which all significant
                    assumptions are observable in the market or can be
                    corroborated by observable market data for substantially the
                    full term of the assets or liabilities.

          o    Level 3 -- inputs are generally unobservable and typically
                    reflect management's estimates of assumptions that market
                    participants would use in pricing the asset or liability.
                    The fair values are therefore determined using model-based
                    techniques that include option pricing models, discounted
                    cash flow models, and similar techniques.

The following table presents assets that are measured and recognized at fair
value on a recurring basis.

<TABLE>
<CAPTION>
              DESCRIPTION            SEPTEMBER 30, 2008    LEVEL 1      LEVEL 2      LEVEL 3
              -----------            ------------------    -------      -------      -------
<S>                                   <C>                <C>          <C>            <C>
      Certificate of Deposit          $ 843,639             $  --     $  843,639       $  --
</TABLE>


(5) INCOME TAXES

       The following reconciles the tax provision with the U.S. statutory tax
       rates:

<TABLE>
<CAPTION>

                                                                          THREE MONTHS ENDED SEPTEMBER 30,
                                                                                2008        2007
<S>                                                                            <C>          <C>
          Income taxes at U.S. statutory rate                                  (35.0)%      (35.0)%
          State taxes, net of federal tax benefit                               (6.0)        (6.0)
          Tax benefit of federal net operating tax loss carryforward            41.0         41.0
          TOTAL EXPENSE (BENEFIT)                                                  0%           0%
                                                                               =====        =====
</TABLE>


       At June 30, 2008, the Corporation had a federal net operating tax loss
       carryforward of approximately $6,855,000 expiring on June 30, 2028. The
       Corporation has provided a valuation allowance of $2,800,881 against its
       deferred tax assets; this represents a full valuation allowance due to
       the uncertainty about the realization of the deferred tax asset.




                                        7

<PAGE>


ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

SPECIAL NOTE ABOUT FORWARD LOOKING STATEMENTS
Certain statements in Management's Discussion and Analysis ("MD&A"), other than
purely historical information, including estimates, projections, statements
relating to our business plans, objectives, and expected operating results, and
the assumptions upon which those statements are based, are "forward-looking
statements" within the meaning of the Private Securities Litigation Reform Act
of 1995, Section 27A of the Securities Act of 1933 and Section 21E of the
Securities Exchange Act of 1934. These forward-looking statements generally are
identified by the words "believe," "project," "expect," "anticipate,"
"estimate," "intend," "strategy," "plan," "may," "should," "will," "would,"
"will be," "will continue," "will likely result," and similar expressions
identify forward-looking statements, but are not the exclusive means of
identifying such statements and their absence does not mean that a statement is
not forward-looking. Forward-looking statements are based on current
expectations and assumptions that are subject to risks and uncertainties, which
may cause actual results to differ materially from the forward-looking
statements. We undertake no obligation to update or revise publicly any
forward-looking statements, whether as a result of new information, future
events, or otherwise.

RESULTS OF OPERATIONS
---------------------

Earnings for the quarter ended September 30, 2008 increased as compared to the
same quarter in the prior year, despite a decrease in overall revenues. For the
quarter ended September 30, 2008, the Corporation reported net income of $50,431
as compared with net income of $31,894 for the quarter ended September 30, 2007.
The increase in earnings was due to an increase in gross profit margins as a
result of the Corporation's focus on sales and service of more sophisticated and
complex IT systems. Revenues for the quarter ended September 30, 2008 were
$8,565,265, as compared to $9,006,996 reported for the same quarter in the prior
year. Revenues from hardware sales increased during the September 2008 quarter,
although service revenues (technical support, repair and maintenance, network
integration, staffing, and training) decreased as compared to the same period in
fiscal 2008, primarily as a result of decreased demand for certain of the
Corporation's legacy technical services.

As referenced above, revenues decreased in the first quarter of fiscal 2009 as
compared to the same quarter in fiscal 2008, a result of the decrease in service
revenues, reflecting the industry-wide reduction in demand for certain legacy
services, which are frequently moved to organizations in countries outside the
Unites States, including India. Revenues from hardware sales increased primarily
due to increases in purchases from state and municipal entities, and educational
clients within New Jersey. Overall profit margins increased to 21% for the
fiscal 2009 quarter from 19% in the same quarter in fiscal 2008. Profit margins
on hardware sales increased to approximately 16% in the September 2008 quarter
from 11% for the September 2007 quarter, in conjunction with our focus on sales
of higher-end IT and IP Telephony systems. As a result of better utilization
rates of our technical staffs, and a reduction in use of subcontracted services,
gross profit margins on service revenues increased to approximately 34% for the
September 2008 from 32% in the 2007 quarters.

During the periods discussed, the Corporation's clients continued to be
conservative in their IT budgetary spending and to scrutinize their IT spending
and the related returns on investments before incurring new expenses. As a
result, management refocused its attention on utilization rates of its service
technicians and selling and administrative expenses to reduce expenses.

Management believes that clients' future spending will be subject to specific
criteria, but also believes that as single source provider, the Corporation will
be in a better position to satisfy client demands for cost-effectiveness and a
suitable return on investment. The Voice over IP ("VoIP") networks marketed




                                        8

<PAGE>

by TransNet are designed with the capacity for "optimization" through the
subsequent addition of layers of solutions, for ex., security solutions. We are
confident that our strategy of being an advanced solutions provider will result
in future revenues from clients' optimization of already installed networks. In
conjunction with these solutions, we note the rapid development of technologies
which now allow for the integration of voice, video, and data at levels not seen
before now, and which provide clients with greater operating efficiencies.

As part of the industry competition pressures discussed herein, management
continues to see certain erosion in business related to Fortune 500 customers as
those customers enter into and/or expand business relationships with large
global partners and the transfer of this business to overseas service providers.
Management believes that projects performed during the first quarters of fiscal
2009 and 2008 countered much of the reduced business, and believes its focus on
higher margin services related to VoIP/IP Telephony and security will lead to
continued growth and opportunities that will help compensate for this reduction.
No assurances can be given, however, that the Corporation will be able to
replace the loss of a significant amount of business from these legacy services,
or that such operations will not be adversely effected.

Service related revenues, a material segment of revenues, are significant in
their contributions to net income because these operations yield a higher profit
margin than equipment sales. Services during the past two fiscal years are
comprised primarily of services related to the sale and implementation of VoIP
networks. These services include planning, design, configuration, installation
and implementation, testing, and optimization. Revenues are also generated by a
variety of support contracts for these networks. Under these agreements,
TransNet's Support Center provides troubleshooting, diagnosis, and remedial
services performed remotely by skilled system engineers, who will be dispatched
to perform on-site repairs, if necessary. The agreements are for twelve months,
and provide a range of guaranteed response time, based upon the client's
specific response requirements or the nature of the outage. The availability of
these services is determined by the client, from 24/7 to next business day. In
addition, our system engineers and service technicians provide service and
support on an on-call basis. Additionally, for the fiscal periods discussed, as
noted above, revenue resulting from contracts with corporate clients for the
provision of service, support, outsourcing, and network integration has
decreased, in conjunction with the erosion of demand for these services. Those
service contracts, with a number of corporate and educational customers, provide
service and support for the customer's personal computers, peripherals, and
networks. These contracts are short-term, and contain provisions which permit
early termination. Although the contracts generally contain renewal terms, there
is no assurance that such renewals will occur.

As noted above, with respect to certain support services, services are performed
for a specific project, such as a VoIP installation, rather performed under a
services related contract, under which technical services are provided for a
specific period of time. Accordingly, the Corporation must rely more upon
projects as a source of revenues. Industry changes have also diminished the
demand for certain legacy support services such as help-desk services, while
increasing the demand for services such as those related to VoIP systems and
call centers. The Corporation has modified its service offerings in response to
these industry fluctuations, and has recruited experienced and specially
certified systems engineers and project managers to respond to increased VoIP
projects.

In addition to the challenging economic environment, the computer industry has
experienced a continuing trend of decreasing prices of computers and related
equipment. Management believes that this trend will continue. Industry-wide, the
result of price erosion has been lower profit margins on sales, which require
businesses to sell a greater volume of equipment to maintain past earning
levels. Another result of the price decreases has been intensified competition
within the industry, including the consolidation of businesses through merger or
acquisition, as well as the increased initiation of sales by certain



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<PAGE>

manufacturers directly to the end-user and the entrance of manufacturers into
technical services business. Management believes that the adoption of policies
by many larger corporate customers, which limit the number of vendors permitted
to provide goods and services for specified periods of time, has further
increased price competition.

To meet these competitive challenges and to maximize the Corporation's profit
margin, management has modified its marketing strategy and has enforced expense
controls. Management also utilizes approaches such as manufacturers' direct
shipment and billing of the customers in exchange for payment to the Corporation
of an "agency fee" as a means to reduce equipment related costs while increasing
profits. These direct ship sales supplement sales through traditional channels,
and are not material. Management's current marketing strategy is designed to
shift its focus to provision of technical services and to sales of lower
revenue/higher profit margin products related to service and support operations.
Management's efforts include targeting commercial, educational, and governmental
customers who provide marketplaces for a wide range of products and services at
one time, a cost-effective approach to sales. These customers often do not have
their own technical staffs and outsource their computer service requirements to
companies such as TransNet. Management believes it maximizes profits through
concentration on sales of value-added applications; promotion of the
Corporation's service and support operations; and strict adherence to cost
cutting controls. In light of the above, management emphasizes and continues the
aggressive pursuit of an increased volume of sales of VoIP systems, and related
technical service and support programs, and has introduced new technical support
programs offering a wide variety of alternatives of remote and on-site network
support and monitoring. Management believes that product sales will continue to
generate a significant percentage of the Company's revenues. In addition, the
Corporation's buying agreement with Ingram Micro, Inc. enhances the
Corporation's competitive edge through product discounts unavailable through
other sources.

The Corporation's performance is also impacted by other factors, many of which
are not within its control. These factors include: industry and general economic
conditions; the short-term nature of client's commitments; patterns of capital
spending by clients; the timing and size of new projects; pricing changes in
response to competitive factors; the availability and related costs of qualified
technical personnel; timing and customer acceptance of new product and service
offerings; trends in IT outsourcing; and product constraints.

During the quarter ended September 30, 2008, selling, general and administrative
expenses increased to 21% from 19% of revenues for the comparative quarter in
the prior year due to increased sales related expenses. These expenses include
those management incurred to invest in the expertise of its sales and support
teams, their certifications, and corporate infrastructure, particularly the
expansion of its sales staff to increase its sales of products and services.
Management incurred these expenses as investments required to meet the demands
of the current IT environment, and to lead to sustainable growth for the
Corporation. Management continues its efforts to control expenses, despite
increasing personnel related costs, such as health benefits.

Interest income decreased in the first fiscal quarter of 2009 as compared to the
comparative quarter as a result of lower interest rates and lower amounts
invested. Interest expense increased in the comparative quarters due to
increased financing for working capital needs.

LIQUIDITY AND CAPITAL RESOURCES
-------------------------------

There are no material commitments of the Corporation's capital resources, other
than leases, lines of credit, and employment contracts.





                                       10

<PAGE>

Cash and cash equivalents decreased in the quarter ended September 30, 2008, as
cash was utilized to fund operations, including the increase in customer orders
received at the end of the quarter, as well as funding increased selling,
general and administrative expenses. Cash levels continue to be negatively
impacted by the slow payment cycles of public sector clients. Efforts subsequent
to September 30, 2008 have expedited some payments. The Corporation has entered
into a credit arrangement to assist in funding operations, as necessary. The
borrowing is secured by certain of the Corporation's assets.

Accounts receivable decreased slightly during the first quarter of fiscal 2009,
in part due to reduced revenues. Although the Corporation continues to be
impacted by the extended and slower payment cycles governmental agencies,
management has initiated vigorous efforts to expedite payments from the
governmental bodies and is working to implement more favorable payment schedules
where possible. Management notes that payment terms with governmental clients
are often dictated by the client.

The increase in accounts payable in the September 2008 quarter is directly
attributable to the product orders placed in response to increase in sales
orders, primarily from public educational clients, placed near the end of the
quarter and purchases made outside our credit line.

The Corporation currently finances the purchases of portions of its inventory
through credit line arrangements with third-party lenders, under which certain
of the Corporation's assets secure the financed purchases. The arrangements
provide for specified interest free payment periods. Outstanding balances under
the credit line arrangements decreased in first quarter of fiscal 2009 because
purchases were made outside the credit line arrangement. Inventory increased for
the September 2008 quarter as the result of purchases to meet existing customer
orders placed near the end of the quarter.

We require access to working capital third party lines of credit and vendor
credit to fund our day-to-day operations, particularly at the end of our fiscal
quarters when demand for our products and services increase. In conjunction with
the tightening of credit in the US economy, management has reviewed the
Corporation's lines of credit and available vendor credit and has taken steps to
obtain the most favorable credit arrangements available. Management believes
that its current available credit will be sufficient to meets its requirements
going forward. The unavailability of such credit going forward may have an
adverse impact upon the operations of the Corporation.

IMPACT OF INFLATION

The effects of inflation on our operations were not significant during the
periods presented.

CRITICAL ACCOUNTING POLICIES
----------------------------

The Corporation's financial statements are prepared in accordance with
accounting principles that are generally accepted in the United States. The
methods, estimates, and judgments used in applying these most critical
accounting policies have a significant impact on the results reported in the
financial statements. The Securities and Exchange Commission has defined
critical accounting policies as policies that involve critical accounting
estimates that require (a) management to make assumptions that are highly
uncertain at the time the estimate is made and (b) different estimates that
could have been reasonably used for the current period, or changes in the
estimates that are reasonably likely to occur from period to period, which would
have a material impact on the presentation of our financial condition, changes
in financial condition or in result of operations. Based on this definition, the
most critical policies include: revenue recognition, allowance for doubtful
accounts, and valuation of deferred tax assets.



                                       11

<PAGE>

Revenue Recognition
-------------------

Revenues related to our equipment sales are recognized when evidence of an
arrangement exists, delivery of equipment has occurred, the sales price of the
equipment being sold to our customers is both fixed and determinable, and
collectability of the accounts receivable related to the equipment sale is
reasonably assured in accordance with SEC Staff Accounting Bulletin No. 104
Topic 13.

Revenues related to our services are recognized as the service is performed
using the percentage of completion method of accounting under which the total
contract revenue during the term of an agreement is recognized on the basis of
the percentage that each contract's proportional performance to date bears to
the total completion of performance. Estimates of proportional performance are
continuously monitored during the term of the contract, and recorded revenues
and costs are subject to revision as the contract progresses.

Accounts Receivable
-------------------

Accounts receivable are reported at their outstanding unpaid principal balances
reduced by an allowance for doubtful accounts, based on certain percentages of
aged receivables. We estimate doubtful accounts based on historical bad debts,
factors related to specific customers' ability to pay and current economic
trends.

Income Tax Accounting
---------------------

The Corporation determines its provision for income taxes using the asset and
liability method. Under this method, deferred tax assets and liabilities are
recognized for the future tax effects of temporary differences of existing
assets and liabilities and their respective tax bases. Future tax benefits of
tax loss and credit carryforwards also are recognized as deferred tax assets.
When necessary, deferred tax assets are reduced by a valuation allowance to the
extent the Corporation concludes there is uncertainty as to their ultimate
realization. Deferred tax assets and liabilities are measured using enacted tax
rates in effect for the year in which those temporary differences are expected
to be recovered or settled. The effect on deferred taxes of a change in tax
rates is recognized in income in the period that the change is enacted.

For the fiscal quarter ended September 30, 2008 and fiscal year ended June 30,
2008, the Corporation had no current or deferred income tax provision. Deferred
taxes are based upon differences between the financial statement and tax basis
of assets and liabilities and available net operating loss carryforwards. A full
valuation allowance has been established due to the uncertainty about the
realization of the deferred tax asset.

INVESTMENT CONSIDERATIONS AND UNCERTAINTIES

THE MATTERS DISCUSSED IN MANAGEMENT'S DISCUSSION AND ANALYSIS AND THROUGHOUT
THIS REPORT THAT ARE FORWARD-LOOKING STATEMENTS ARE BASED ON CURRENT MANAGEMENT
EXPECTATIONS THAT INVOLVE RISK AND UNCERTAINTIES. POTENTIAL RISKS AND
UNCERTAINTIES INCLUDE, WITHOUT LIMITATION: THE IMPACT OF ECONOMIC CONDITIONS
GENERALLY AND IN THE INDUSTRY FOR IT PRODUCTS AND SERVICES; DEPENDENCE ON KEY
VENDORS AND CUSTOMERS; CONTINUED COMPETITIVE AND PRICING PRESSURES IN THE
INDUSTRY; PRODUCT SUPPLY SHORTAGES; OPEN-SOURCING OF PRODUCTS OF VENDORS,
INCLUDING DIRECT SALES BY MANUFACTURERS; RAPID PRODUCT IMPROVEMENT AND
TECHNOLOGICAL CHANGE, SHORT PRODUCT LIFE CYCLES AND RESULTING OBSOLESCENCE
RISKS; TECHNOLOGICAL DEVELOPMENTS; CAPITAL AND FINANCING AVAILABILITY; AND OTHER
RISKS SET FORTH HEREIN.



                                       12

<PAGE>



ITEM 4. CONTROL AND PROCEDURES

The Chief Executive Officer and Chief Financial Officer of the Corporation have
concluded, based on their evaluation as of September 30, 2008, that the
Corporation's disclosure controls and procedures are not effective to ensure
that information required to be disclosed by the Corporation in the reports
filed or submitted by it under the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), is recorded, processed, summarized and reported within the
time periods specified in the SEC's rules and forms, and include controls and
procedures designed to ensure that information required to be disclosed by the
Corporation in such reports is accumulated and communicated to the Corporation's
management, including the Chief Executive Officer and Chief Financial Officer,
as appropriate to allow timely decisions regarding required disclosure.

In light of this conclusion, the Corporation has initiated documentation of its
policies and procedures, and will institute compensating procedures and
processes as necessary to ensure the reliability of its financial reporting.
Management intends to remediate weaknesses in the control environment through
new resources and processes in its accounting department. Management believes
that its actions will continue to improve the Corporation's internal control
over financial reporting, as well as its disclosure controls and procedures.

There were no significant changes in the Corporation's internal controls or in
other factors that could significantly affect these controls subsequent to the
date of such evaluation. The Corporation has commenced a review by its internal
staff, including its accounting staff, of new processes to provide an evaluation
of the level of controls and related procedures currently in place for each
process.




                                       13

<PAGE>


                                     PART II
                                OTHER INFORMATION



ITEM 6: EXHIBITS AND REPORTS ON FORM 8-K

         A. Exhibits --
             31.1 Certification required by Section 302
             31.2 Certification required by Section 302
             32  Certification required by Section 906

         B. Reports on Form 8-K --
             On October 2, 2008, TransNet Corporation filed a Form 8-K under
             Item 7.

                                   SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.

                              TRANSNET CORPORATION
                              (Registrant)


                              /s/ STEVEN J. WILK
                              --------------------------------------
                              Steven J. Wilk, President and
                              Chief Executive Officer


                              /S/ JOHN J. WILK
                              --------------------------------------
                              John J. Wilk,
                              Principal Financial and Accounting Officer
                              and Chairman of the Board of Directors

DATE: November 14, 2008



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